Professor Philip Alston, United Nations Special Rapporteur on extreme poverty and human rights, has released a report on his recent visit to the UK where he provides a damning analysis of the state of poverty and inequality within the UK, summing up:
“In the area of poverty-related policy, the evidence points to the conclusion that the driving force has not been economic but rather a commitment to achieving radical social re-engineering…Universal Credit and the other far-reaching changes to the role of government in supporting people in distress are almost always ‘sold’ as being part of an unavoidable program of fiscal ‘austerity’, needed to save the country from bankruptcy. In fact, however, the reforms have almost certainly cost the country far more than their proponents will admit.”
In this article, I will however argue that this is also economically driven and part of a class political project: neoliberalism. You only have to look at the fact that “eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity” to see how economic and political power, relating to class, interrelate. Also, consider “Britain’s billionaires have seen their net worth more than double since the recession, with the richest 1,000 families now controlling a total of £547bn” as another example of the continued expansion of the super rich.
David Harvey, Distinguished Professor of Anthropology & Geography at The Graduate Center, CUNY, has written a lot on neoliberalism, which he defines as the following:
“I’ve always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labour.”
Harvey talks about how Reagan and Thatcher were crucial to the transition towards this new system, leading a class assault to further their own interests with institutions and think tanks set up and funded to help promote this project. This related to the reduced role of the state providing public services, the emphasis on the freedom of the market alongside a rise in privatisation – especially of public services – and also the emphasis upon personal responsibility and individual liberty and expression (over genuine social justice organisation) while the state provides subsidies and assistance to capital and corporations. This has led to extreme levels of debt, especially personal, relating to contradictions in capitalism as people borrow to be able to deal with a crisis of living standards and stagnating wages and benefits, and reduction in important social programmes. Harvey refers to how capital doesn’t get blamed, it is protected. This happened so obviously in the 2007/2008 financial crisis, with banks bailed out and the rest of us taking the hit.
Importantly, Harvey argues that neoliberalism heavily relies upon legitimacy for it to continue to be a successful class project:
“The big problem for the neoliberal project is getting popular legitimacy. When it started out there was a lot of popular legitimacy. By the time you get to the 1990s and you are into the Clinton years of neoliberalism people start to realise…they are being had. So they went into alliance with the neoconservatives and so you get the neoconservatives and the neoliberals in alliance. Now you are beginning to see the movement towards neoliberalism and the connection to the neofascists/neo right wing, alternative right wing. So this is something that is really, really bothersome.”
In another article, Harvey explains the same problem:
“The neoliberal argument had a lot of legitimacy in the 1980s and 1990s as being liberatory in some way. But nobody believes that any more. Everybody realises it’s a con job in which the rich get richer and the poor get poorer. But we’re beginning to see the possible emergence of an ethno-nationalist protectionism-autarky, which is a different model. That doesn’t sit very well with neoliberal ideals. We could be headed into something which is much less pleasant than neoliberalism, the division of the world into warring and protectionist factions who are fighting each other over trade and everything else.”
Harvey, talking at the relaunch of Tribune event at The World Transformed, refers to the power of the Koch brothers and how important they are for helping create this new version of legitimacy, after they funded the Tea Party to “create chaos in Washington” helping further apathy towards politics and establishment politicians, relating to the election of Donald Trump as President who has “done everything that is in the neoliberal playbook”. Harvey explains that the Koch brothers disagree with Trump on free trade and on immigration, but Trump has been key to further neoliberalism as a political project.
A similar thing can be said of the UK, with the rise of the far right – linking in with Brexit arguments of our little island succeeding on its own like the good old days of the Empire. With this, things such as immigration are blamed for the problems caused by capital and the increasing expansion of speculative finance and related crisis and inequality.
Alston’s report draws clear connections between Brexit and the implications this will have on people in poverty and inequality:
“In my meetings with the government, it was clear to me that the impact of Brexit on people in poverty is an afterthought, to be dealt with through manipulations of fiscal policy after the event, if at all. But Brexit will have serious consequences in this domain and the challenges need to be dealt with head on. A lack of clarity is preventing families at risk of poverty from planning for its impact. People feel their homes, jobs, and communities are at risk. Ironically, it was these very fears and insecurity that contributed significantly to the Brexit vote…The UK stands to lose billions of pounds in EU funds that will disproportionately affect the poorer areas that have most benefited from them, including almost £9 billion in poverty reduction funding between 2014 and 2020. Although the government has announced a “shared prosperity fund” to replace this funding, local and devolved governments told me they had no information about the fund or how it would operate—just five months before Brexit. Time is running out.”
This relates to concerns from Labour leader Jeremy Corbyn, who has written to Theresa May to ask her and the government to not ignore Alston’s report, that Tory Brexit will result in a “bargain basement Brexit” ushering in lower taxes for corporations whilst attacking labour power alongside human rights.
Alston’s report also focuses heavily on Universal Credit, providing a damning assessment of the hardship and pain this is causing to so many people:
“The Universal Credit system is designed with a five week delay between when people successfully file a claim and when they receive benefits. Research suggests that this “waiting period,” which actually often takes up to 12 weeks, pushes many who may already be in crisis into debt, rent arrears, and serious hardship, requiring them to sacrifice food or heat…One of the key features of Universal Credit involves the imposition of draconian sanctions, even for infringements that seem minor. Endless anecdotal evidence was presented to the Special Rapporteur to illustrate the harsh and arbitrary nature of some of the sanctions, as well as the devastating effects that resulted from being completely shut out of the benefits system for weeks or months at a time. As the system grows older, some penalties will soon be measured in years.”
Central to David Harvey’s work is analysing Marx’s theory of commodities and how key they are to capitalism. As part of neoliberalism, we have seen the commodification of essential public services that should not be commodities, including healthcare, housing, transport and education. This could be argued about the internet too, which Harvey uses as an example for how fast moving capital is and how efficient it is at co-opting things:
“we have the internet, which everyone thought of initially as a great liberatory technology that would allow for a great deal of human freedom. But now look what’s happened to it. It’s dominated by a few monopolies that collect our data and give it to all kinds of seedy characters who use it for political purposes.”
Rather than seeing access to the internet as a human right, something the creator of the internet argues it is, access and usage to and of the internet has become again part of the neoliberal project where lots of people don’t have the resources or skills to do so. However, as part of the government’s 2017 Government Transformation Strategy, Alston refers to the ambition for “government services [to] become ‘digital by default’” and “the inner workings of government itself will be transformed in a push for automation aided by data science and artificial intelligence.” Alston links this into the discussion around Universal Credit, which is “the first major government service that is ‘digital by default.’” As Alston states, “One wonders why some of the most vulnerable and those with poor digital literacy had to go first in what amounts to a nationwide digital experiment.”
Alston refers to several other political programmes and policies that this government and the Coalition government before have brought in, which disproportionately punish poorer people, including the benefit cap and reductions, cuts to legal aid, local authority cuts significantly impacting upon the community, public and statutory services and importantly argues that “poverty is a political choice”.
Despite all this evidence of growing inequality, poverty and hardship, the argument that the neoliberal free market is the best way to operate is one that our current Prime Minster and the Bank of England are readily willing to accept and promote, with Theresa May arguing in a Bank of England speech in September 2017:
“A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created… [it is] unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country.”
As Harvey argues, “Value is fixed by whatever price is realised in the market”, which puts the blame on the individual for not making it and training themselves to succeed in the current system rather than questioning what this value and price really means and the social impact this actually creates. On benefits? Your fault. Lost your home? Your fault. Can’t find a job? Your fault. The system is protected.
The response to Alston’s report from Amber Rudd, the new Secretary of State for Work and Pensions? To attack it as “extraordinarily political” whilst denying the real stories and lives affected by this government’s cruel policies. But neoliberalism isn’t about about moralism, it’s about furthering the corporate, capital and financial interests of a few over the rest. And here again we can see what Harvey is talking about when discussing the increasing crisis of legitimately of neoliberalsm. However, the rise of ethno-nationalist protectionism, found in the arguments supporting Brexit for instance, show how this class project can adapt. These policies are forms of social control, repression, creating division and alienation whilst the media and political discourse help whip up the fear of the ‘other’ whether that be migrants or benefit claimants (as shown with Universal Credit) etc. But as Trump shows in the U.S, and Bolsonaro in Brazil with his inner circle stuffed of Chicago school economic thinkers, there are cracks and contradictions in neoliberalism, and people are mobilising against this political project.